Tremendous cost and time efficiencies can be gained from a more cooperative working environment. By sharing the benefits, we want to help contractors get their profit margins up while getting MTR's cost down. The two are not necessarily contradictory.
Since MTR Corp. was established in 1975, our approach to project management has remained consistent. The guiding principle is to complete projects on time and within budget, because the mass transit network in Hong Kong is a commercial investment that incurs high capital cost, and achievement of schedule is absolutely essential to allow revenue to start flowing.
Any problem encountered by our contractors is regarded as our own.
Consultants are appointed to carry out detailed design and specialist studies, and contractors build, or design-and-build, but everything else is taken up by a substantial in-house project management team.
We project-manage in the broadest sense of the term, taking responsibility for construction supervision, coordination between multiple contracts, coordination with the government over land and utilities issues, and for obtaining approval from the principal statutory authorities such as the Inspector of Railways.
We proactively manage risk by ensuring progress is closely monitored and problems are identified early so solutions can be found. We also maintain the shortest possible lines of communication between what is happening on the ground and top decision-making levels.
Our aim is best achieved through working with our contractors in a cooperative manner—any problem encountered by our contractors is regarded as our own. This is a fundamental principle of MTR's approach to project management and explains why we rarely take liquidated damages from contractors for being late, which defeats the purpose of opening a railway on time.
One of the advantages we have is the flexibility to take the commercial route to solve money and program problems instead of the contractual route. For example, a contract has no provisions for extensions of time in cases where the delay is the contractor's fault, but we will enter into commercial negotiations to accelerate the work. Delays are seldom entirely the fault of a single party, which is why MTR is prepared to enter commercial negotiations over additional cost, sequencing and variations of requirements to arrive at a mutually acceptable solution.
Many client organizations do not have the same ready access to commercial discussions because of the hierarchy involved in obtaining funding approvals. This means that MTR spends more money on project management than most similar client organizations. But we firmly believe that it is a worthwhile investment because of the benefit we reap through high-quality project management and supervision in terms of on-time delivery, within budget. The high-level expertise we have in-house also means we can obtain expert advice on a wide range of technical issues, which helps us avoid spending money on costly delays.
In recent years, we have put more and more effort into the softer issues of project management, such as improving efficiency, building a collaborative environment, avoiding abortive work by minimizing change and ensuring clarity of requirements by improving our definition of the scope of a project.
Over the last three to four years, our experience in these initiatives has been the need to delegate more responsibility and authority to the people on site. This means more demands are placed on the site staff in terms of their competence and interpersonal skills. This also provides the opportunity for enhanced job satisfaction.
An element in the original investment in project management is the nature of the congested, heavily built-up environment in which we operate. This is even more important today, because we are putting more time and effort into managing interfaces with the community and government departments. It does mean that, for our project managers, technical skills are no longer enough.
Our project management approach has served us well: we have delivered five major MTR extensions, all of them ahead of time and within budget. We expect to do the same at the Tseung Kwan O Extension, which is targeted to be completed 10 weeks ahead of schedule. PM